South Boulder Mines: Colluli in Eritrea is now a Tier 1 asset hosting 194Mt
of contained potash
Monday, April 16, 2012 by <
http://www.proactiveinvestors.com.au/about_us>
John Phillips
Successful exploration by South Boulder at Colluli in Eritrea has delivered
an 85% jump in contained potash to 1.08bt at 18% KCl for 194mt of potash.
The project is evolving into being the world's first open cut potash mine -
and has mine life extension potential.Successful exploration by South
Boulder at Colluli in Eritrea has delivered an 85% jump in contained potash
to 1.08bt at 18% KCl for 194mt of potash. The project is evolving into being
the world's first open cut potash mine - and has mine life extension
potential.
South Boulder Mines (
<
http://www.proactiveinvestors.com.au/companies/sponsors_landing/1142/south-
boulder-mines-1142.html> ASX: STB) has once again expanded the resource at
the Colluli Potash Project in Eritrea which is fast tracking towards
becoming the world's first open cut potash mine.
The sustained exploration success at the project by South Boulder has
culminated in a 85% increase in the contained potash, with the resource now
1.08 billion tonnes at 18% KCl for 194 million tonnes of potash.
Most importantly for the future ease of extraction, mineralisation starts
from just 16 metres below the surface.
Lorry Hughes, managing director, commented on the positive news saying that
the upgrade further confirms Colluli as a Tier 1 asset, and that the 17 year
mine life indicated in the Scoping Study will definitely be extended.
"In addition, the scoping study didn't consider substantial production
increases that are apparent from this huge resource.
"Over the course of the definitive feasibility study, the upside will be
included to demonstrate the significance of Colluli in relation to the
global potash market."
Negotiations have commenced with the Government of Eritrea for its purchase
of a paid participating interest in the Colluli Project, which was announced
last month, and is the precursor to the formation of the Joint Venture Share
Company and the ultimate granted Mining Exploitation License.
Resource upgrade impact - more to come
The outcome of the jump in resources at Colluli is the positive impact on
improving the already robust economics of an open pit mine. Importantly, the
shallow deposit is open in many directions and is expected to grow further
with the current resource extension drilling programs.
An engineering Scoping Study completed in November 2011 demonstrated a
pre-tax NPV of US$1.33 billion with start-up capital costs of US$0.74
billion.
This study was based on Stage 1 production of 1 million tonne of KCl
annually from the potash mineral cylvite, a zone which represents only a
small part of the overall deposit. The study investigated a 17-year open
pit operation and forecast an internal rate of return of 40.6%.
As an indication of the growth potential of Stage 1, the study only included
around 16% of the potash contained within the previous October 2011 resource
estimate.
Studies are currently underway to incorporate additional zones of potassium
minerals to further enhance the overall commercial outcomes.
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Received on Mon Apr 16 2012 - 13:09:52 EDT
